Teck Resources Ltd. is selling a stake in a large Chilean copper project for US$1.2-billion to a Japanese mining company in a deal that will see Canada’s biggest diversified miner proceed with a major expansion of its copper business.

On Tuesday, Vancouver-based Teck said its board had approved the US$4.7-billion construction of Quebrada Blanca Phase 2 (QB2) after selling a 30-per-cent share in the project to Sumitomo Metal Mining and Sumitomo Corporation.

Teck will put the proceeds raised from Sumitomo toward the construction of QB2, which it hopes to have in production in about three years. After those funds are exhausted, two-thirds of the future costs of construction will come from Teck and one-third from Sumitomo. Chile’s state-owned Empresa Nacional de Mineria (ENAMI), which owns 10 per cent of the project, has no funding commitments.

Teck says QB2 should produce about 316,000 tonnes of copper equivalent a year for the first five years, which would put it in the top 20 worldwide. During a conference call on Tuesday, a number of analysts congratulated Teck’s chief executive Don Lindsay for getting a higher than expected price for selling part of QB2.

In an interview, Shane Nagle, analyst with National Bank Financial, said the consensus value for the entire project was about US$1.2-billion.